That's an ugly problem - stick frame isn't designed to live underground and it sounds like that would be the fate of the uphill exterior wall if I understand your idea correctly. I have a similar but less pronounced issue where a 100 yr-old house was moved and is resting on a foundation essentially at grade. Here are some thoughts on the problem, but I'm afraid I haven't found any "good" solution.
You can waterproof concrete walls pretty well on the wet side and concrete can survive water better than wood. If the building rests on a concrete foundation you can "hang" the exterior wall, cut 48" or so off it's bottom, dowl in rebar to the existing foundation wall and pour a higher thicker foundation wall on that side. Then water proof it down to the footing, install drains, etc. When looking at this option you would probably want to think carefully about the additional lateral force the taller foundation wall with the berm leaning on it would need to support. Digging all the way to the footing and thickening the wall 4" from footing right on up to the top and including #5 rebar (or so) in the new thickness would increase strength of what is essentially a retaining wall (at least the part above floor level - force from up hill would want to "lean" the wall into the building and at floor level your floor structure should pass this force across to the downhill wall but above floor level the wall would have to support the lateral load by itself).
Big job and you'd still need to deal most carefully w/traveling water.
You can install what amounts to a shower wall on the stick frame (use cement board, spread-on or polyurethane, eg swimming pool liner, water barriers and some kind of tile or such to protect the water proofing) that will stop the water. To survive, the base of this wall needs to be connected irrevocably to the top of the foundation wall because there will be lateral force applied to the wall as you berm it and it settles over the years; that same joint needs to be water proofed, a very challenging problem if intended to last. Possibly a variation might be to dig to the footing then cover the wall from the footing on up to your desired height with some type of geo-cloth designed for waterproofing; that would probably require chemical coatings to be applied as well. In either case the stick structure would need the strength to carry the lateral load from uphill.
Big job and you'd still need to deal most carefully w/traveling water... Hmm.
May be as effective to cut to the chase and just deal w/the water... But w/out the berm. So we're back to where you started. <G>
You can't, not cost effectively. I am assuming you are on a slab, since you aren't complaining about a flooded basement. Berming against the house will not solve anything but the surface water.
Go well upslope and build your berm, a SWALE with a waterway on each side to push the water around the house well away from it. Maybe even more of a terrace (compacted swale) so it doesn't infiltrate as much.
Build as many swales as you can upslope starting as high on the property as you can. Don't let it pick up any more speed coming down the hill.
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what r scott said, I agree with. My old house had a problem with water coming down hard and fast. Every couple of years we had to put sand bags/concrete blocks (anything we had) across the yard very quickly to divert the water. I also had to knock down a fence at side of house cause it was slowing the escape down stream. We since sold the house and the new owners did a swale at the street. If the street had curbs it wouldn't have been a problem. The swale basically became a curb.
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